EXHIBIT 4.3
Reimbursement Agreement
REIMBURSEMENT AGREEMENT
BY AND BETWEEN
TERAFORCE TECHNOLOGY CORPORATION
AND
O. S. ▇▇▇▇▇, JR.
Dated as of December 30, 2002
TABLE OF CONTENTS
Page
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Parties...........................................................................................................1
Preamble..........................................................................................................1
ARTICLE I
Section 1.1 Definitions.....................................................................................2
Section 1.2 Interpretation..................................................................................5
ARTICLE II
Section 2.1 Guaranty........................................................................................6
Section 2.2 Prior Obligations...............................................................................6
ARTICLE III
Section 3.1 Reimbursable Amounts and Other Payments.........................................................6
Section 3.2 Obligations Absolute............................................................................6
Section 3.3 Security Interest...............................................................................7
Section 3.4 Indemnity.......................................................................................7
ARTICLE IV
Section 4.1 Warrants........................................................................................7
Section 4.2 Additional Warrants.............................................................................8
Section 4.3 Registration Rights.............................................................................8
ARTICLE V
Section 5.1 Representations and Warrants of the Company.....................................................8
Section 5.2 Representations of the Guarantor................................................................9
ARTICLE VI
Section 6.1 Conduct of Business.............................................................................9
ARTICLE VII
Section 7.1 Restrictions on Borrowing.......................................................................9
Section 7.2 Liens and Pledges of Assets and Stock...........................................................9
Section 7.3 No Mergers, etc. ...............................................................................9
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ARTICLE VIII
Section 8.1 Successors and Assigns.........................................................................10
Section 8.2 Notices........................................................................................10
Section 8.3 Amendment......................................................................................10
Section 8.4 Effect of Delay and Waivers....................................................................11
Section 8.5 Counterparts...................................................................................11
Section 8.6 Severability...................................................................................11
Section 8.7 Governing Law and Jurisdiction.................................................................11
Section 8.8 Prior Agreements...............................................................................11
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REIMBURSEMENT AGREEMENT
This
REIMBURSEMENT AGREEMENT dated as of December 30, 2002,
(the "Agreement), is made by and between
TERAFORCE TECHNOLOGY CORPORATION, a
Delaware corporation (the "Company"), and O. S. ▇▇▇▇▇, JR., an individual
residing in ▇▇▇▇▇▇ County,
Texas ("▇▇▇▇▇" or "Guarantor") (the Company and
Guarantor collectively referred to as the "Parties")
WITNESSETH:
WHEREAS, effective June 1, 2001, the Company entered into a
loan arrangement with Bank One, N.A. (the "Bank") providing for the loan of up
to $4,500,000 to the Company (the "June Loan Agreement"); and
WHEREAS, in order to induce the Bank to enter into the June
Loan Agreement, ▇▇▇▇▇ and certain other persons issued letters of credit in the
aggregate face amount of $5,000,000 (the "Letters of Credit") in order to secure
the loan thereunder; and
WHEREAS, amounts outstanding under the June Loan Agreement and
the face amount of the Letters of Credit have been reduced by $2,000,000 and the
Company and the Bank have entered into an amendment and extension of the June
Loan Agreement (the "Amended Loan Agreement");
WHEREAS, in order to induce the Bank to enter into the Amended
Loan Agreement, pursuant to consideration to be given by the Company to
Guarantor, Guarantor has caused to be issued to the Bank a letter of credit in
the face amount of $3,000,000 and substantially in the form as in Exhibit A
hereto (the "New Letter of Credit");
WHEREAS, the Bank shall provide Advances (as hereinafter
defined) to the Company in accordance with the provisions of the Amended Loan
Agreement and, subject to the terms and conditions of the Amended Loan
Agreement, shall be entitled to make demand upon Guarantor pursuant to the
provisions of New Letter of Credit in the case of an Event of Default (as
defined in the Loan Agreement) by the Company under the Amended Loan Agreement
or Amended Loan Documents (as hereinafter defined); and
WHEREAS, effective October 12, 2001 the Company entered into a
loan agreement with the Bank providing for the loan of up to $1,500,000 to the
Company (the "October Loan Agreement"); and
WHEREAS, in order to induce the Bank to enter into the October
Loan Agreement, ▇▇▇▇▇ executed a limited guarantee to secure the loan there
under (the "Guarantee"); and
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WHEREAS, the Company and the Bank have entered into a series
of extensions of the October Loan Agreement and expect to enter into a further
extension and amendment of this agreement (the "Amended October Loan
Agreement"); and
WHEREAS, in order to induce the Bank to enter into the Amended
October Loan Agreement, the Guarantor has agreed to continue to provide the
Guarantee in a form acceptable to the Bank; and
WHEREAS, Guarantor has agreed to continue to provide the
Guarantee and the New Letter of Credit provided that the Company executes and
delivers this Agreement, subject to the terms and conditions provided herein;
and
WHEREAS, the Bank shall provide Advances (as hereinafter
defined) to the Company in accordance with the provisions of the Amended October
Loan Agreement and, subject to the terms and conditions of the Amended October
Loan Agreement, shall be entitled to make demand upon Guarantor pursuant to the
provisions of the Guarantee in the case of an Event of Default (as defined in
the Loan Agreement) by the Company under the Amended October Loan Agreement or
Amended October Loan Documents (as hereinafter defined); and
WHEREAS, the Guarantor has made cash advances to the Company
aggregate $600,000 and as evidenced by the Promissory Notes; and
WHEREAS, the Guarantor has agreed to extend the due date for
the Promissory Notes to September 15, 2003;
NOW, THEREFORE, in consideration of the foregoing, the Company
hereby covenants and agrees with Guarantor as follows:
ARTICLE I
GENERAL TERMS
Section 1.1. Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Advances" shall mean an advance of funds under and subject to
the terms and conditions of the Amended Loan Agreement and the Amended October
Loan Agreement and other Loan Documents, provided that the principal amount
outstanding shall never exceed the Loan Maximum.
"Agreement" shall have the meaning specified in the preamble.
"Amended Loan Agreement" shall have the meaning specified in
the recitals and in substantially the form as in Exhibit F.
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"Amended October Loan Agreement" shall have the meaning
specified in the recitals and in substantially the form as in Exhibit G.
"Associated Expenses" shall mean the expenses associated with
recovering the Guarantor Advances, excluding the Guarantor Advances and interest
thereon.
"Bank" shall have the meaning set forth in the recitals.
"Common Stock" shall mean the common stock, par value $0.01,
of the Company.
"Company" shall have the meaning specified in the preamble.
"Demand for Reimbursement" shall have the meaning specified in
Section 3.1(a).
"Draft" means, with respect to the New Letter of Credit, any
negotiable or non-negotiable instrument or demand for payment on the New Letter
of Credit or the Guarantee.
"Existing Warrants" shall mean the aggregate of the following:
(i) warrants for the purchase of 360,000 shares of Common Stock at a price of
$0.20 per share, expiring October 31, 2004; (ii)warrants for the purchase of
600,000 shares of Common Stock at a price of $0.80 per share, expiring October
31, 2004; (iii) warrants for the purchase of 150,000 shares of Common Stock at a
price of $0.75 per share, expiring December 31, 2003; and (iv) warrants for the
purchase of 720,000 shares of Common Stock at a price of $0.75 per share,
expiring May 31, 2004.
"Governmental Authority" means any United States or foreign
federal, territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"Guarantor Advance" shall mean the amount of money advanced by
the Guarantor to the Bank pursuant to a demand for payment by the Bank on the
New Letter of Credit or the Guarantee.
"Guarantor" shall have the meaning specified in the preamble.
"Guarantee" shall have the meaning set forth in the recitals.
"Issuer" shall mean the party providing the New Letter of
Credit. Specifically, the Issuer is O. S. ▇▇▇▇▇, Jr.
"June Loan Agreement" shall have the meaning set forth in the
recitals.
"Letters of Credit" shall have the meaning set forth in the
recitals.
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"Lien" means any lien, mortgage, security interest, pledge,
assignment, charge, title retention agreement or encumbrance of any kind and any
other arrangement for a creditor's claim to be satisfied from assets or proceeds
prior to the claims of other creditors or the owners.
"Loans" shall mean the Company's obligations pursuant to the
Amended Loan Agreement and the Amended October Loan Agreement.
"New Loan Agreement" shall have the meaning set forth in the
recitals.
"Loan Documents" shall mean the Amended Loan Agreement and
Amended October Loan Agreement with the Bank and all exhibits and related
documents thereto, as they may be amended, extended or modified from time to
time, including, without limitation, a promissory note.
"Loan Maximum" shall mean the principal amounts outstanding of
Four Million Two Hundred Thousand Dollars ($4,200,000).
"New Letter of Credit" shall have the meaning set forth in the
recitals.
"October
Reimbursement Agreement" shall mean that
Reimbursement Agreement dated October 19, 2001 by and between
TeraForce
Technology Corporation and O.S. ▇▇▇▇▇, Jr.
"Original
Reimbursement Agreement" shall mean that certain
Reimbursement Agreement dated June 1, 2001 among the Company, and O.S. ▇▇▇▇▇,
Jr., ▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇.
"Permitted Liens" means (a) Liens for taxes or governmental
assessments, employee benefit obligations, charges or claims the payment of
which is not yet due, or are being contested in good faith for which adequate
reserves have been established or (b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other similar Persons and
other Liens imposed by applicable law incurred in the ordinary course of
business for sums not yet delinquent or not material in amount and being
contested in good faith.
"Person" means an individual, corporation, partnership,
association, limited liability company, trust, estate or other similar business
entity or organization, including a Governmental Authority.
"Promissory Notes" shall mean collectively that promissory
note dated September 29, 2001 by the Company payable to ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., in
the amount of $250,000; that promissory note dated October 5, 2001 by the
Company payable to ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., in the amount of $250,000; and that
promissory note dated October 12, 2001 by the Company payable to ▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇., in the amount of $100,000.
"Registration Rights Agreement" shall have the meaning
specified in Section 5.2.
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"Reimbursement Obligation" shall have the meaning specified in
Section 3.1(a).
"Related Documents" shall mean the Warrants, the Replacement
Warrants and the Registration Rights Agreement.
"Security Agreement" shall have the meaning specified in
Section 3.3.
"Warrants" shall have the meaning specified in Section 4.1.
Section 1.2. Interpretation.
(a) In this Agreement:
(i) the singular number includes the plural number
and vice versa;
(ii) reference to any gender includes each other
gender;
(iii) the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(iv) reference to any Person includes such Person's
heirs, administrators, successors and assigns but, if applicable, only if such
heirs, administrators, successors and assigns are permitted by this Agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually, provided that nothing in this subclause (iv) is
intended to authorize any assignment not otherwise permitted by this Agreement;
(v) reference to any agreement, document or
instrument means such agreement, document or instrument as amended, supplemented
or modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms hereof, and reference to the Note includes any
Note issued pursuant hereto in extension or renewal hereof and in substitution
or replacement herefor;
(vi) unless the context indicates otherwise,
reference to any Article, Section, Schedule or Exhibit means such Article or
Section hereof or such Schedule or Exhibit hereto;
(vii) the words "including" (and with correlative
meaning "include") means including, without limiting the generality of any
description preceding such term;
(viii) with respect to the determination of any
period of time, the word "from" means "from and including" and the word "to"
means "to, but excluding";
(ix) reference to any law means such as amended,
modified, codified or reenacted, in whole or in part, and in effect from time to
time; and
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(b) No provision of this Agreement shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
ARTICLE II
THE GUARANTIES
Section 2.1 Guaranty. On the terms and subject to the terms hereof,
Guarantor agrees to cause to be issued the New Letter of Credit and will
continue to provide the Guarantee in a form reasonably acceptable to the Bank.
The New Letter of Credit shall be substantially in the form attached hereto as
Exhibit A.
Section 2.2 Prior Obligations. The obligation under this section
supersede the obligations of the Guarantor pursuant to the Original
Reimbursement Agreement and the October
Reimbursement Agreement.
ARTICLE III
REIMBURSEMENT
Section 3.1. Reimbursable Amounts and Other Payments
(a) Amounts. The Company shall reimburse Guarantor the amount
paid by Guarantor to the Bank equal to the amount of his Guarantor Advance and
any taxes, fees, charges or other costs and expenses incurred by Guarantor in
connection with such payment (the "Reimbursement Obligation"). Each such
Reimbursement Obligation shall be paid by the Company to Guarantor promptly upon
written demand from Guarantor ("Demand for Reimbursement"), but in no event
later than thirty (30) days after such demand. Each such Demand for
Reimbursement, in order to be valid, shall be accompanied by sufficient
documentation supporting the amount of the Reimbursement Obligation.
(b) Interest. The Company shall pay interest on any and all
amounts remaining unpaid under Section 3.1(a) at any time from the date such
amounts become payable until paid in full, payable on demand, at simple interest
at the prime rate established by Bank One, N.A., plus 2.0% per annum (or, if
less, the highest rate permitted under applicable law).
(c) Currency. All payments by the Company to Guarantor shall
be made in lawful currency of the United States of America and in immediately
available funds at, and pursuant to, such instructions as Guarantor may from
time to time give.
Section 3.2. Obligations Absolute.
(a) The Company's obligations under this Article III shall be
absolute and unconditional irrespective of any set-off, counterclaim, or defense
to payment which the Company may have or have had against the Bank.
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(b) The Company hereby agrees that Guarantor shall not be
responsible for, and the Reimbursement Obligations shall not be affected by,
among other things,
(i) the validity or genuineness of documents or of
any endorsements thereon even though such documents
shall prove to be invalid, fraudulent, or forged;
(ii) any dispute between the Company and the Bank; or
(iii) any claims whatsoever of the Company against
the Bank.
(c) Guarantor shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, howsoever transmitted, in connection with the Guaranty, except for
errors or omissions caused by Guarantor's primary negligence or willful
misconduct.
(d) The Company agrees that any action taken or omitted by the
Guarantor in connection with the Guaranty, provided Guarantor's actions are not
the result of Guarantor's primary negligence, willful misconduct, or breach of
contractual obligations, shall be binding on the Company and shall not result in
any liability to Guarantor.
Section 3.3 Security Interest The Company hereby appoints ▇▇▇▇▇ as its
true and lawful attorney-in-fact to execute and deliver on the Company's behalf
the Security Agreement upon the occurrence of any Reimbursement Obligation, the
form of which is attached as Exhibit B, (the "Security Agreement") and execute
and file any necessary UCC financing statements, to grant to Guarantors a valid
lien and security interest in the Accounts and Inventory (each as defined in the
Security Agreement) of the Company.
Section 3.4 Indemnity In addition to the rights and obligations set
forth in Section 3.1(a), the Company hereby agrees to indemnify and hold
harmless Guarantor, and each of his respective successors, heirs and assigns,
from and against any and all claims and damages, losses, liabilities, costs or
expenses (including reasonable attorneys fees) which Guarantor may incur by
reason of or in connection with the issuance, execution and delivery or transfer
or payment or failure to pay the Guarantee except to the extent of the primary
negligence or willful misconduct of Guarantor, or as may be attributable to
Guarantor's breach of his obligations under this Agreement.
ARTICLE IV
WARRANTS
Section 4.1. Warrants. As an additional inducement to enter into this
Agreement, the Company agrees to issue to ▇▇▇▇▇ Warrants to purchase an
aggregate of 960,000 shares of
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Common Stock at an exercise price per share of NO AND 12/100 DOLLARS ($0.12),
the form of which is attached as Exhibit C (the "Warrants").
Section 4.2. Additional Warrants. As an inducement to enter into this
Agreement, but for which ▇▇▇▇▇ would not do, the Company agrees to issue to
issue Replacement Warrants to purchase an aggregate of 1,830,000 shares of
Common Stock at an exercise price per share of NO AND 12/100 DOLLARS ($0.12),
the form of which is attached as Exhibit D (the "Replacement Warrants"). The
Replacement Warrants will be issued upon the exchange and cancellation of the
Existing Warrants.
Section 4.3. Registration Rights. The Company further agrees to grant
the registration rights to register the resale of the shares of Common Stock to
be issued pursuant to the Warrants and the Replacement Warrants in accordance
with the Registration Rights Agreement attached hereto as Exhibit E (the
"Registration Rights Agreement").
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warrants of the Company. The Company
hereby represents and warrants to Guarantor as follows:
(a) Corporate Existence and Good Standing. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its property and carry on its business as now conducted, and is
in good standing and authorized to do business in each jurisdiction in which the
Company owns real property or conducts such business, where the failure to
maintain such good standing or authorization is reasonably expected to have a
materially adverse effect on its business, operations or financial or other
condition, or could materially adversely affect its ability to perform its
obligations under this Agreement.
(b) Authorization and Validity. This Agreement and Related
Documents have been duly authorized by all necessary corporate action, and each
has been duly executed and delivered by the Company and each is valid, binding
and enforceable against the Company in accordance with its terms except as may
be limited by bankruptcy or insolvency laws and similar laws affecting creditor
rights generally and by generally and by general principles of equity.
(c) No Conflict; Government Consent; Title to Assets; No
Liens. Neither the execution and delivery of this Agreement and Related
Documents, nor the consummation of the transactions contemplated hereby or
thereby nor compliance with the terms hereof or thereof under the circumstances
contemplated hereby or thereby will conflict with, are prohibited by or will
contravene, violate or constitute a breach of or a default under the Amended and
Restated Certificate of Incorporation or By-Laws of the Company or constitute on
the part of the Company a material breach of or a material default under any
agreement or other instrument to which the Company is a party or any existing
law, administrative regulation, or, to its knowledge, any court order or consent
decree to which the Company is subject, or by which any of its properties is
bound.
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5.2 Representations of Guarantor. Guarantor represents and
warrants to the Company that he has full power and authority to execute and
deliver this Agreement and the Related Documents, and that this Agreement and
Related Documents are valid, binding and enforceable in accordance with their
terms as they relate to such Guarantor, except as may be limited by bankruptcy
and insolvency laws, and similar laws affecting creditors rights generally and
by general principals of equity. Guarantor represents and warrants to the
Company that the provisions of Section 2.3 of the Warrant and the Additional
Warrant are true and correct as though made on the date hereof, and will be true
and correct on the date of exercise of the Warrant and the Additional Warrant.
ARTICLE VI
AFFIRMATIVE COVENANTS
Section 6.1 Conduct of Business. The Company covenants and agrees that
it shall remain duly incorporated, validly existing and in good standing as a
domestic corporation in the State of Delaware, will not voluntarily dissolve
without first discharging its obligations under this Agreement.
ARTICLE VII
NEGATIVE COVENANTS
Section 7.1. Restrictions on Borrowing. So long as the New Letter of
Credit or the Guarantee is outstanding, except for obligations of the Company on
the date hereof or under the Amended Loan Agreement or the Amended October Loan
Agreement, and extensions or refinancings under such agreements, the Company
shall not, nor permit any of its subsidiaries to, create, incur, assume or
suffer to exist any liability for borrowed money with an aggregate amount
outstanding in excess of $1,000,000, without the consent of Guarantor, which
consent shall not be unreasonably withheld.
Section 7.2. Liens and Pledges of Assets and Stock. So long as the New
Letter of Credit or Guarantee is outstanding, the Company shall not create,
incur, assume or suffer to exist, directly or indirectly, any Lien on its assets
without the consent of Guarantor, which consent shall not be unreasonably
withheld; provided, however, that this Section 7.2 shall not prohibit the
Company from creating, assuming or suffering to exist the following Liens: (i)
Liens existing as of the date hereof and renewals and replacements thereof or
the repledging of assets pledged thereunder; (ii) Liens incurred in the ordinary
course of business not in connection with the borrowing of money; (iii) Liens
arising from this Agreement an the documents in connection therewith; and (iv)
Permitted Liens.
Section 7.3 No Mergers, etc. Except as otherwise permitted in the Loan
Agreement or herein, the Company will not sell, transfer or otherwise dispose of
all or substantially all of its assets (either in a single transaction or in a
series of related transactions), and will not merge into or consolidate with any
partnership, corporation or other entity and will not permit one or more
partnerships, corporations or other entities to merge into or consolidate with
it without the prior express written consent of Guarantor, which consent will
not be unreasonably withheld.
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ARTICLE VIII
COVENANTS
Section 8.1 Successors and Assigns. This Agreement shall be binding
upon each party and their respective successors, heirs and assigns.
Section 8.2. Notices. All notices, requests and demands to or upon the
respective parties shall be in writing (including by facsimile) and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made (a) in the case of delivery by hand, when delivered, (b) in the case of
delivery by mail, three (3) days after being deposited in the mails, postage
prepaid, or (c) in the case of delivery by facsimile, when sent and receipt has
been confirmed, addressed as follows:
If to ▇▇▇▇▇: O. S. ▇▇▇▇▇, Jr.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
TeraForce Technology Corporation
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman
& CEO
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ Boeing, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any entity entitled to receive notice hereunder may, by notice given
hereunder, designate any further or different addresses to which subsequent
notices, certificates or other communications shall be sent.
Section 8.3. Amendment. This Agreement may be amended, modified or
discharged only upon an agreement in writing of the Company and Guarantor.
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Section 8.4. Effect of Delay and Waivers. No delay or omission to
exercise any right or power accruing upon any default, omission or failure of
performance hereunder shall impair any such right or power or shall be construed
to be a waiver thereof, but any such right and power may be exercised from time
to time and as often as may be deemed expedient. In order to entitle Guarantor
to exercise any remedy now or hereafter existing at law or in equity or by
statute, it shall not be necessary to give any notice, other than such notice as
may be herein expressly required. In the event any provision contained in this
Agreement should be breached by any party and thereafter waived by the other
party so empowered to act, such waiver shall be limited to the particular breach
so waived and shall not be deemed to waive any other breach hereunder. No
waiver, amendment, release or modification of this Agreement shall be
established by conduct, custom or course of dealing, but solely by an instrument
in writing duly executed by the parties thereunto duly authorized by this
Agreement.
Section 8.5. Counterparts. This Agreement may be executed
simultaneously in counterparts, each of which shall be deemed an original, but
both of which together shall constitute one and the same instrument.
Section 8.6. Severability. The invalidity or unenforceability of any
one or more phrases, sentences, clauses or Sections contained in this Agreement
shall not affect the validity or enforceability of the remaining portions of
this Agreement, or any part thereof. In particular, this section means (among
other things) that the Company does not agree or intend to pay, and Guarantor
does not agree to contract for, charge, collect, take, reserve or receive
(collectively referred to herein as "charge or collect"), any amount in the
nature of interest or in the nature of a fee for anything construed to be a
loan, which would in any way or event (including demand, prepayment, or
acceleration) cause Guarantor to charge or collect more for entering into this
Agreement than the maximum amount Guarantor would be permitted to charge or
collect by federal law or the laws of the State of
Texas. Any such excess
interest or unauthorized fee shall, instead or anything stated to the contrary,
be applied first to reduce the principal balance of the loan, if any, and when
the principal has been paid in full, refunded to the Company.
Section 8.7. Governing Law and Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Texas.
Section 8.8 Prior Agreements. This Agreement supercedes the Original
Reimbursement Agreement and the October Reimbursement Agreement.
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This Agreement has been signed by the Company as of the date first above
written.
COMPANY:
TeraForce Technology Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman and CEO
GUARANTOR:
/s/ O. S. ▇▇▇▇▇ ▇▇.
-----------------------
O. S. ▇▇▇▇▇, Jr.
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